public finance fiscal & monetary policy section 4 MCQ Questions & Answers Detailed Explanation

Answer: (a)

Revenue deficit means the excess of current revenue expenditure over current revenue receipts. Revenue deficit indicates that the government cannot meet its current expenditure from its current revenue. Revenue deficit= Revenue expenditure – Revenue receipts

Answer: (d)

The process of bridging the gap between the revenue and expenditure is called deficit financing. In other words, Deficit financing refers to the ways in which the budgetary gap is financed

Answer: (d)

An initial public offering (IPO) or stock market launch is a type of public offering where shares of stock in a company are sold to the general public, on a securities exchange, for the first time.

Through this process, a private company transforms into a public company. Initial public offerings are used by companies to raise expansion capital, to possibly monetize the investments of early private investors, and to become publicly traded enterprises.

A company selling shares is never required to repay the capital to its public investors. After the IPO, when shares trade freely in the open market, money passes between public investors.

Answer: (d)

It is a service offered by a securities depository under which the depository maintains book accounts recording the ownership of securities held on behalf of the depository’s participants, for eligible securities.

Answer: (b)

In economics, a transfer payment (or government transfer or simply transfer) is a redistribution of income in the market system.

These payments are considered to be exhaustive because they do not directly absorb resources or create output. In other words, the transfer is made without any exchange of goods or services.

Examples of certain transfer payments include welfare (financial aid), interest on public debt, social security, and government making subsidies for certain businesses (firms).

Answer: (c)

In India, the professional tax is imposed at the state level. However, not all the states impose this tax. Business owners, working individuals, merchants and people carrying out various occupations comes under the purview of this tax. Professional tax is levied by particular Municipal Corporations.